Income Tax Appellate Tribunal - Chennai
P.K.Muyeenuddin, Chengalput vs Assessee on 28 August, 2012
IN THE INCOME-TAX APPELLATE TRIBUNAL
'A' BENCH, CHENNAI.
Before Dr. O.K. Narayanan, Vice-President &
Shri Challa Nagendra Prasad, Judicial Member
I.T.A. Nos. 631 & 632/Mds/2012
Assessment Year : 2004-05
Shri P.K. Muyeenuddin, The Income Tax Officer,
11 & 12 Sengundram Industrial Vs. Company Circle VI(3),
Estate, Chengalpet 603 204 Chennai.
[PAN:AEIPM4366P]
(Appellant) (Respondent)
S.P. Nos. 47 and 48/Mds/2012
[In I.T.A. Nos. 631 & 632/Mds/2012]
Assessment Year : 2004-05
Shri P.K. Muyeenuddin, The Income Tax Officer,
11 & 12 Sengundram Industrial Company Circle VI(3),
Vs.
Estate, Chengalpet 603 204 Chennai.
(Appellant) (Respondent)
Appellant by : Shri N. Devanathan, Advocate
Respondent by : Shri Shaji P. Jacob, Addl.CIT
Date of Hearing : 28.08.2012
Date of pronouncement : 13.09.2012
ORDER
PER Challa Nagendra Prasad, Judicial Member
The assessee has filed two Stay Petitions in the appeals in I.T.A. Nos. 631 and 632/Mds/2012 for the assessment year 2004-05 and these stay petitions are also posted for hearing today i.e. 28.08.2012 along with the 2 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 appeals. Since the appeals filed by the assessee have been taken up for adjudication, the Stay Petitions filed by the assessee have become infructuous and are accordingly dismissed.
2. Now coming to the appeals, these two appeals are filed by the assessee against the order of the Commissioner of Income Tax (Appeals) VI, Chennai dated 17.02.2012 for the assessment year 2004-05 one appeal against quantum and the other against penalty order passed under section 271(1)(c) of the Income Tax Act. Shri N. Devanathan, Advocate represented on behalf of the assessee and Shri Shaji P. Jacob, Addl. CIT represented on behalf of the Revenue.
3. The main issue in the quantum appeal of the assessee is that the Commissioner of Income Tax (Appeals) erred in holding that the appeal filed by the assessee is not maintainable.
4. Facts of the case are that the assessee filed return of income for the assessment year 2004-05 on 21.12.2005 admitting income of `.10,55,086/- and agricultural income of `.2,50,000/-. The assessment was completed under section 143(3) of the Act on 28.09.2006 and the assessment order was served on the assessee on the same day. The assessee filed revision petition under section 264 before the Commissioner of Income Tax on 18.04.2007 along with all supporting evidences on the claims requesting the 3 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 Commissioner of Income Tax to consider the evidences filed and revise the assessment order.
5. The Commissioner of Income Tax by his order dated 14.10.2008 dismissed the revision petition filed by the assessee. The assessee filed appeal before this Tribunal against the dismissal order passed by the Commissioner of Income Tax under section 264 of the Act. On advise of the Chartered Accountant, the assessee came to know that an appeal filed against an order passed under section 264 by the Commissioner of Income Tax is not maintainable before this Tribunal, but an appeal has to be filed before the Commissioner of Income Tax (Appeals) against the additions/disallowance made in the assessment order passed under section 143(3) of the Act. Therefore, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) on 10.06.2009 with a delay of 956 days.
6. The Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee holding it as not maintainable. The Commissioner of Income Tax (Appeals) held that sub-clause (a) of section 264 clearly specifies that if the assessee chooses to file an appeal before the Commissioner of Income Tax (Appeals), the Commissioner shall not revise the assessment on a petition filed under section 264 of the Act. Therefore, according to the Commissioner of Income Tax (Appeals), since the assessee has exercised 4 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 option to file a petition under section 264 before the administrative Commissioner, the assessee cannot file an appeal now before the Commissioner of Income Tax (Appeals) seeking condonation of delay in filing appeal after ascertaining the outcome of the petition under section 264. Therefore, the Commissioner of Income Tax (Appeals) dismissed the appeal in limine as not maintainable.
7. The counsel for the assessee submits that the Hon'ble Jurisdictional High Court in the case of CIT v. D. Lakshminarayanapathi [250 ITR 187], in an identical facts and circumstances held that invoking revisional jurisdiction under section 264 could not constitute a bar in filing an appeal before the Appellate Assistant Commissioner notwithstanding his unsuccessful effort at having the order revised. The counsel for the assessee submits that in view of the Hon'ble Jurisdictional High Court's decision, the appeal filed before the Commissioner of Income Tax (Appeals) is very much maintainable and therefore should have entertained the appeal filed by the assessee.
8. The counsel for the Revenue, the Addl.CIT - DR submits that the Commissioner of Income Tax (Appeals) dismissed the appeal filed by the assessee holding it as not maintainable without condoning the delay in filing the appeal. The counsel for the Revenue submits that an appeal, which was held to be not maintainable by the Commissioner of Income Tax (Appeals) under sub-section (3) to section 249, such an order is not an appealable 5 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 order before this Tribunal as the Commissioner of Income Tax (Appeals) did not pass such order under section 250. He contends that only such order which is passed under section 250 by the Commissioner of Income (Appeals) is an appealable order before this Tribunal. The counsel for the Revenue submits that order passed by the Commissioner of Income Tax (Appeals) dismissing the appeal in limine without condoning the delay and admitting the appeal under section 249(3) is not an order passed under section 250 and therefore, no appeal lies before the Tribunal on such order passed by the Commissioner of Income Tax (Appeals). For this proposition, he relied on the decision of the Hon'ble Kerala High Court in the case of V.K. Sreenivasan v. DCIT [70 DTR (Ker.) 341], wherein their Lordships held that an order passed by the Tribunal under section 253(5) dismissing an appeal on limitation without condoning the delay is not an order passed under section 254(1) and therefore not an appealable order before the High Court under section 260A(1) of the Act.
9. We have heard both sides, perused the materials available on record and the case law relied on by the counsels. The Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee as not maintainable on the ground that the assessee had already approached the Commissioner of Income Tax by way of a revision petition under section 264 and therefore since the assessee had approached the Commissioner of Income Tax under 6 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 section 264, an appeal will not lie before the Commissioner of Income Tax (Appeals). The Hon'ble Jurisdictional High Court in the case of CIT v. D. Lakshminarayanapathi (supra) held that the Tribunal has rightly held that the assessee notwithstanding his unsuccessful effort at having the order revised could still file an appeal before the Commissioner of Income Tax (Appeals). Invoking the revisional jurisdiction could not constitute a bar in filling an appeal before the Commissioner of Income Tax (Appeals) and it is for the legislature to impose such a bar if it consider necessary to do so. Respectfully following the Hon'ble Jurisdictional High Court's decision, we hold that the appeal filed by the assessee is maintainable though the assessee chose to file revision petition before the Commissioner of Income Tax under section 264 and could not succeed before him.
10. Coming to the contentions of the counsel for the Revenue that an appeal dismissed in limine by the Commissioner of Income Tax (Appeals) under section 249(3) without condoning the delay and admitting the appeal is not an order passed under section 250 and therefore not appealable before this Tribunal, we are not inclined to accept this contention. The Hon'ble Supreme Court in the case of Mela Ram & Sons v. CIT [29 ITR 607], the Apex Court held that an order passed by Appellate Assistant Commissioner holding that there was no sufficient reason for excusing the delay under section 30(2) of Income Tax Act 1922 [corresponding to section 7 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 249(3) of Income Tax Act 1961] and rejecting the appeal as time barred is an order passed under section 31 of Income Tax Act 1922 [corresponding to section 250 of Income Tax Act, 1961] and therefore an appeal lies through that order to the Appellate Tribunal. The Hon'ble Apex Court further held that it makes no difference whether the order of dismissal is made before or after the appeal is admitted. This decision of the Hon'ble Apex Court is not considered by the Hon'ble Kerala High Court in the case of V.K. Sreenivasan (supra) while delivering the judgment. For that matter none of the decisions on the issue were considered by the Hon'ble High Court of Kerala in coming to the conclusion that an order passed by the Tribunal without condoning the delay in filing an appeal is not an order passed under section 254(1) and therefore no appeal lies before the High Court under section 260A(1) of the Act. In the case of State of Tamil Nadu & Ors. v. P.M. Madhavan Nair & Ors [49 STC 244] and The State of Tamil Nadu v. Singhi Traders [57 STC 209], the Hon'ble Madras High Court held that an appeal lies to the Tribunal against the first appellate authority's order rejecting the condonation of delay in filing the first appeal. In the circumstances, we hold that the appeal filed by the assessee before this Tribunal is maintainable.
11. In view of the above, we restore this appeal to the file of the Commissioner of Income Tax (Appeals) for disposal in accordance with law after condoning the delay. Since the appeal in quantum proceedings is 8 I.T.A. No.631 No.631 & 632/M/ 632/M/12 /M/12 restored to the file of the Commissioner of Income Tax (Appeals), we also restore the appeal filed against levy of penalty under section 271(1)(c) of the Act since the outcome of the appeal in quantum proceedings will have a bearing on the penalty appeal.
12. In the result, both the stay petitions of the assessee are dismissed as infructuous and both the appeals of the assessee are allowed for statistical purposes.
Order pronounced on Thursday, the 13th of September, 2012 at Chennai.
Sd/- Sd/- (Dr. O.K. NARAYANAN) (CHALLA NAGENDRA PRASAD) VICE-PRESIDENT JUDICIAL MEMBER Chennai, Dated, the 13.09.2012 Vm/- To: The assessee//A.O./CIT(A)/CIT/D.R.